Massive SNB losses, rising Swiss inflation

A closer look at Swiss inflation data for February suggests that underlying price pressures are higher than initially meets the eye. We think this will encourage the SNB to raise rates by at least 50bp at its meeting on 23rd March. Meanwhile, the SNB confirmed that it made a record loss in 2022 amounting to nearly 18% of GDP. However, although this means it won’t pay out any distributions to the Confederation or Cantons this year, this should have only a minimal impact on the fiscal stance over the coming years.